SEC RELEASES NEW GUIDANCE ON THE USE OF COMPANY WEBSITES
On August 1, 2008, the SEC released interpretive guidance concerning the use of websites as a means of communicating important information to the investing public. The SEC last released guidance on this topic in 2000. Since then, investors have been increasingly using the Internet to get information about public companies. This updated interpretive guidance was anticipated to be a significant step in recognizing such changes and elaborating on the role of the anti-fraud provisions of the securities laws in light of the changing environment...
Electronic Forums. The SEC encourages companies to put procedures and controls in place to monitor statements made on behalf of the company in electronic forums and reminds companies that interactive features, such as blogs and electronic shareholder forums, are subject to the anti-fraud provisions of the federal securities laws. This means companies are responsible for statements made by the company or on its behalf on their website or a third party website, and liability cannot be avoided by purporting to speak in one’s “individual” capacity. In addition, the release makes clear that a company cannot require investors to waive protections under the federal securities laws as a condition to accessing or participating in a blog or forum. However, a company is not responsible for statements made by third parties and is not obligated to respond or correct misstatements made by third parties, even if those statements are made on a company-sponsored forum or blog.
What if: I'm the UPS man that visits the company every workday. Am I trading on inside info ? OR My investment group hires a private investigator and scopes out the company/insiders, etc. Am I in violation if I trade on that non-public info ? OR I get info from the CEOs mistress or a one-night-stand prostitute, and I trade on it.
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